Origin Energy annual profit soars; shares slip on bleak electricity outlook
Aug 15 (Reuters) - Australia's Origin Energy, opens new tab posted a 58% jump in annual underlying profit on Thursday but missed market expectations, and warned that electricity profits could decline in fiscal 2025 and hurt the division's earnings, sending its shares 9% lower.
The country's second-largest power producer expects its electricity gross profit to decrease in the current year due to regulated tariffs that have resulted in lower wholesale prices and reduced retail margins amid high coal costs.
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Underlying earnings before interest, taxes, depreciation, and amortization for Energy Markets unit is forecast between A$1.1 billion and A$1.4 billion ($723.58 million and $920.92 million) for fiscal 2025, compared with A$1.04 billion from a year ago.
Analysts at UBS flagged that the mid-point of the unit's guidance is 13% lower than consensus estimates.
"Stock (is likely) to trade weaker on softer than expected FY24 earnings, due to higher costs than forecast in Energy Markets and APLNG (Australia Pacific LNG)."
Shares in the company fell as much as 9.4% to A$9.67 by 0023 GMT, their lowest level since May 6, while the broader benchmark, opens new tab rose marginally by 0.3%.
A surge in output at Origin's Eraring power plant and a temporary cap on coal prices helped the company meet the rising domestic demand.
The company said its annual performance was also helped by higher earnings at its main Energy Markets unit and Integrated Gas businesses.
That boosted underlying profit to A$1.18 billion ($778.33 million) for the year ended June 30, from A$747 million a year ago. But it missed an LSEG estimate of A$1.34 billion.
The Sydney-based company declared a final dividend of 27.5 Australian cents per share, compared with 20 Australian cents a year earlier.
($1 = 1.5202 Australian dollars)
Reporting by Roushni Nair and Aaditya Govind Rao in Bengaluru; Editing by Pooja Desai and Rashmi Aich